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Return to Being Black, Living in the Red: A Race Gap in Wealth That Goes Beyond Social Origins

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  • Alexandra Killewald

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    Abstract

    In the United States, racial disparities in wealth are vast, yet their causes are only partially understood. In Being Black, Living in the Red, Conley ( 1999 ) argued that the sociodemographic traits of young blacks and their parents, particularly parental wealth, wholly explain their wealth disadvantage. Using data from the 1980–2009 waves of the Panel Study of Income Dynamics, I show that this conclusion hinges on the specific sample considered and the treatment of debtors in the sample. I further document that prior research has paid insufficient attention to the possibility of variation in the association between wealth and race at different points of the net worth distribution. Among wealth holders, blacks remain significantly disadvantaged in assets compared with otherwise similar whites. Among debtors, however, young whites hold more debt than otherwise similar blacks. The results suggest that, among young adults, debt may reflect increased access to credit, not simply the absence of assets. The asset disadvantage for black net wealth holders also indicates that research and policy attention should not be focused only on young blacks “living in the red.” Copyright Population Association of America 2013

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    File URL: http://hdl.handle.net/10.1007/s13524-012-0190-0
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    Bibliographic Info

    Article provided by Springer in its journal Demography.

    Volume (Year): 50 (2013)
    Issue (Month): 4 (August)
    Pages: 1177-1195

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    Handle: RePEc:spr:demogr:v:50:y:2013:i:4:p:1177-1195

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    Web page: http://www.springer.com/economics/journal/13524

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    Related research

    Keywords: Wealth; Inequality; Racial disparities; Multigenerational;

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    1. Joseph G. Altonji & Ulrich Doraszelski, 2001. "The Role of Permanent Income and Demographics in Black/White Differences in Wealth," NBER Working Papers 8473, National Bureau of Economic Research, Inc.
    2. W. G. Gale & J. K. Scholz, . "Intergenerational transfers and the accumulation of wealth," Institute for Research on Poverty Discussion Papers 1019-93, University of Wisconsin Institute for Research on Poverty.
    3. Christopher D Carroll & Karen E Dynan & Spencer D Krane, 1999. "Unemployment Risk and Precautionary Wealth: Evidence from Households' Balance Sheets," Economics Working Paper Archive 416, The Johns Hopkins University,Department of Economics.
    4. Kerwin Kofi Charles & Erik Hurst, 2002. "The Transition To Home Ownership And The Black-White Wealth Gap," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 281-297, May.
    5. Blinder, Alan S, 1973. "A Model of Inherited Wealth," The Quarterly Journal of Economics, MIT Press, vol. 87(4), pages 608-26, November.
    6. Lisa Keister, 2003. "Sharing the wealth: The effect of siblings on adults’ wealth ownership," Demography, Springer, vol. 40(3), pages 521-542, August.
    7. Menchik, Paul L & Jianakoplos, Nancy Ammon, 1997. "Black-White Wealth Inequality: Is Inheritance the Reason?," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 428-42, April.
    8. Alexis Yamokoski & Lisa Keister, 2006. "The Wealth Of Single Women: Marital Status And Parenthood In The Asset Accumulation Of Young Baby Boomers In The United States," Feminist Economics, Taylor & Francis Journals, vol. 12(1-2), pages 167-194.
    9. Barsky R. & Bound J. & Charles K.K. & Lupton J.P., 2002. "Accounting for the Black-White Wealth Gap: A Nonparametric Approach," Journal of the American Statistical Association, American Statistical Association, vol. 97, pages 663-673, September.
    10. Maury Gittleman & Edward N. Wolff, 2004. "Racial Differences in Patterns of Wealth Accumulation," Journal of Human Resources, University of Wisconsin Press, vol. 39(1).
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